Sea reported earnings per share of $0.7 on revenue of $7.8 billion, while Wall Street expected an EPS of $0.86 on revenue of $7.1 billion, according to Fiscal.ai data.
- Shopee remained Sea’s largest business in the second quarter, with gross merchandise volume rising 28.4% year-on-year to $38.3 billion.
- Sea’s gaming business Garena also delivered a strong quarter, with bookings rising 15.5% YoY to $763.5 million.
- Monee posted the fastest revenue growth among Sea’s three core businesses, with revenue rising 58.9% YoY to $1.4 billion.
Sea’s (SE) American Depositary Receipts were on track to hit their highest level in six months on Tuesday after the Singapore-based technology company reported stronger-than-expected second-quarter revenue, with Shopee leading growth across its businesses.
Sea reported earnings per share (EPS) of $0.7 on revenue of $7.8 billion, while Wall Street expected an EPS of $0.86 on revenue of $7.1 billion, according to Fiscal.ai data.
“Our strong momentum from the first quarter has continued into the second. Our investments have enabled Shopee and Monee to continue to strengthen our market leadership while improving our user penetration,” said CEO Forrest Li.
Sea is the holding company for the popular online games developer Garena, the digital payments and financial services provider Monee, and the e-commerce platform Shopee.
Sea’s ADRs were up more than 12% in Tuesday’s pre-market trade. SE was among the top trending tickers on Stocktwits at the time of writing.
Shopee Remains SE’s Growth Engine
Shopee remained Sea’s largest business in the second quarter (Q2), with gross merchandise volume (GMV) rising 28.4% year-on-year to $38.3 billion. Gross orders increased 27.5% to 4.2 billion during the quarter.
Revenue climbed 48.2% YoY to $5.6 billion, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 12.2% YoY to $255.4 million. Core marketplace revenue, which primarily includes transaction fees and advertising, jumped 65.6% to $4.3 billion.
Li said the combination of larger scale and improving efficiency has strengthened Shopee’s profitability.
“With this solid momentum, we are optimistic that Shopee will achieve the milestone of US$1 billion in adjusted EBITDA for the full year,” Li said.
Garena Builds On Free Fire Momentum
Sea’s gaming business Garena also delivered a strong quarter, with bookings rising 15.5% YoY to $763.5 million. Revenue increased 33.5% YoY to $746.6 million, while adjusted EBITDA climbed 16.7% YoY to $429.8 million.
Free Fire remained the key driver, with the game continuing to attract more than 100 million average daily active users. Garena had 666.3 million quarterly active users in Q2, while quarterly paying users increased 10.2% to 68.1 million.
Looking ahead, Sea is seeking to diversify Garena’s portfolio with two recently announced mobile games, Palworld Online and Monster Hunter Outlanders, both based on established intellectual property.
Li Sees Significant Room To Expand Monee’s User Base
Monee posted the fastest revenue growth among Sea’s three core businesses, with revenue rising 58.9% YoY to $1.4 billion. Adjusted EBITDA increased 12.8% YoY to $288 million.
Li said the company still sees significant room to expand Monee’s user base and credit penetration. “Only a fraction of the users across our ecosystem are using Monee’s financial products today, and credit penetration remains low across our markets,” he said.
SE ADR is down 11% year-to-date and 22% over the past 12 months. The iShares MSCI EAFE ETF (EFA) is up 20% over the past 12 months, while the iShares Core MSCI EAFE ETF (IEFA) is up 19%.
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